The “catastrophic unintended consequences” of the UK Budget will spell disaster for hospitals in Powys, warns Care Forum Wales (CFW).

CFW, which represents 500 private and charity social care providers, has launched its “Save Social Care, Save the NHS” campaign. It states that a combination of National Insurance (NIC) increases and the rise in the Real Living Wage will create a £150 million funding shortfall across Wales. The organisation warns that care homes and providers in Powys will collapse without an NHS-style exemption or emergency financial support.

If care homes and domiciliary care companies go out of business, vulnerable individuals will be left without care, putting more strain on the already overwhelmed NHS and creating longer waiting times. CFW fears that many providers will be unable to absorb the increased costs, worsening the crisis.

CFW chair Mario Kreft MBE outlined these concerns in letters to Welsh MPs, Senedd members, First Minister Eluned Morgan, and Health Minister Jeremy Miles, as well as UK Prime Minister Keir Starmer and Chancellor Rachel Reeves. The campaign is supported by the Five Nations Group, representing care organisations from across the UK and Eire, which shares concerns that third-sector providers, including charities and hospices, will also be affected by the “ruinous measures” in the Budget.

In his letter, Mr Kreft wrote: “We have more than 400 members across the private and third sectors and they have reached out to us in alarm about the measures contained in the Budget. We have calculated that this would amount to a £150 million funding gap across the sector in Wales without an NHS-style exemption or additional financial support. Since 2020, 40 Welsh care homes have closed and if more of them are forced out of business, this will also place an additional burden on our hospitals which are already struggling to cope even before the onslaught of the added winter pressures.”

The Budget increases employer NICs by 1.2 per cent to 15 per cent and lowers the earnings threshold from £9,100 to £5,000, which will impose extra costs on providers. For staff earning the Real Living Wage of £25,000, this represents a 37 per cent rise in NICs. According to CFW, the combination of NIC changes and rising wages will result in tens of thousands of pounds in additional costs for average-sized care homes, with larger homes facing bills of hundreds of thousands.

Mr Kreft pointed out that the gap between the fees commissioned by local authorities and the actual cost of care has grown, with authorities often failing to follow the Welsh Government’s guidelines on care fees.

The Nuffield Trust warned that the Budget’s measures could cause “swathes of the social care market” to collapse under the extra cost pressures. CFW also raised concerns about the impact of Inheritance Tax changes on family-run care homes, especially in rural Welsh areas.

Mr Kreft said that the Welsh Government's Covid financial support was the best in the UK and is needed again for this "potential national emergency”.